Avoid buying into stocks of little-known companies: Harendra Kumar

In a chat with ET Now, Harendra Kumar, MD, Institutional Equities, Elara Capital, shares his view on Force Motors.

ET Now: It is quite difficult to find the reason behind Force Motors’ recent upsurge. A bunch of people who own the stock are wondering who is buying because I have received messages from people asking me who have been buyers on the counter. For somebody, who is holding the stock right now, it is the time to book profits? People are also reminded of what stocks of Eicher and Motherson Sumi have done.

Harendra Kumar: There is not much information about the company at this given point of time, except there are some HNI investors, who had invested in the company. Obviously, they are the only guys who know the story at this given point of time. The first rule for investing is not to get into something that you do not know. This is an unknown company. So, we do not cover Force Motors. That said the rally has been spectacular. The only information that we have is that the price is re-rating. I am sure we are still in the dark as much as you guys are.